© Reuters. FILE PHOTO: In this illustration taken on October 24, 2023, physical representations of the cryptocurrency bitcoin are seen. REUTERS/Dado Ruvic/Illustration/File Photo
By Amanda Cooper and Tom Westbrook
LONDON/SINGAPORE (Reuters) – Bitcoin hit a two-year high on Tuesday on signs that big players are buying the cryptocurrency, while its smaller rival ether surpassed $3,200 for the first time since 2022.
has risen more than 10% in two sessions, helped by a disclosure on Monday by software company and crypto investor MicroStrategy that it had recently purchased around 3,000 bitcoins for an outlay of $155 million.
The original and largest cryptocurrency by market value has also recently been boosted by the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States. On Monday, trading volumes in several of the funds soared and cryptocurrency-linked companies also recovered, in contrast to nervous markets overall.
Bitcoin rose as high as $57,036 in Asian morning trading, its highest since late 2021. Ether rose as high as $3,275, its highest since April 2022.
“Supply is limited… but the demand unleashed by U.S. spot ETFs appears to be relentless,” said Justin d'Anethan, head of Asia partnerships at Keyrock, a digital asset market maker.
A major incentive right now is the bitcoin halving event in April. This process is designed to slow the release of bitcoin, whose supply is limited to 21 million – of which 19 million have already been mined – by halving the reward for producing the tokens.
Bitcoin has gained 32% in value so far in February, heading for its biggest single-month gain since January 2023, and momentum is gaining beyond the investment community.
Social media platform Reddit, which filed to list its shares on the New York Stock Exchange on February 22, said it had invested a small portion of its excess cash reserves in bitcoin, ether and matic, the native token of the Polygon network, as a form of payment for sales of certain virtual goods.
Ether, which rose 1.1% to hit two-year highs of around $3,220, has risen at an even faster pace this month, heading for a 41% gain.
Anticipation among market participants is growing over the potential regulatory approval of spot ether ETFs, which has contributed to this latest price rally.
“The prospect of an ethereum spot ETF is a new development for both traders and investors following the recent launch of a range of bitcoin ETFs,” DailyFX senior strategist Nick Crawley said in a note.
“It represents further maturation of the cryptocurrency market and a recognition of Ethereum's role in the future of cryptocurrencies within the financial system.”
